>> we appreciate your time. see you at 6:00. tonight on "world news," stopping at nothing. rupert murdoch's giant media empire reeling after a bombshell. his tabloid reporters bribing police and eavesdropping on the most vulnerable people in the news. free woman. casey anthony will walk out of jail in days. hear why one juror says thth had to let her off. an abc news exclusive. healthy living. could the long-awaited promise of stem cells now come true? see what they do for a damaged heart. and, survival story. jaycee dugard, imprisoned, kidnapped by a predator for 18 years. tonight, how does a child give birth in a backyard? >> i wasn't alone. and i knew i could never let anything happen to her.

>> jaycee dugard, a message of courage and life. good evening. you may have suspected it was happening, but we confirm tonight the dark underbelly of tabloid journalism and what some of those reporters will do. here's a measure of the outrage. the biggest newspaper in england has been brought to its knees, closing, over. rupert murdoch, whose empire extends to america and includes fox news and "the wall street journal," shaken by what the truth turns out to be. so, let's go to jeffrey kofman in london, who tells us about the huge scandal caused by tabloid reporters. jeffrey, good evening. >> reporter: and good evening, diane. you know, this is truly epic. media barron rupert murdoch's papers here thrive on selling scandal. tonight, his entire global

empire rocked by a scandal of its own. one that defies all sense of human decency. "the news of the world," for years, the biggest english language newspaper in the world, is dead. a desperate move by the world's biggest media tycoon to contain a scandal that has stained his entire global empire. >> nothing to say at this stage. >> reporter: rupert murdoch, whose reporters relentlessly hound people for stories, was in sun valley, idaho, today, where he was tight-lipped. >> i'm not making any comments. >> reporter: that was left to his son and heir. >> we now know that the practices that are being discussed that we're talkingng about here were such that we've fundamentally breached a trust with our readers. >> reporter: nothing, it seems, would stop "the news of the world's" pursuit of a sensational headline. in 2002, britain was riveted by the story of 13-year-old milly dowler, who had vanished. this week, it was revealed that the paper listened to her

voice mail, deleting old messages to make room for new ones. that activity gave her family and police hope that she was alive. false hope. milly was later found murdered. >> appalling, absolutely appalling. >> it's outrageous. it really is outrageous. >> reporter: and thehe's more. six years ago today, terrorist bombings in london killed 52. on this anniversary, grieving families learned that the newspaper hacked their cell phones, trolling for intimate details. one of those cell phones belonged to graham foulkes, who lost his son. >> it's a violation, isn't it? and i still don't know what i think about it, other than i'm really angry. really angry. >> reporter: it gets worse. today, allegations that the paper hackck voice mails of the families of british soldiers killed in iraq and afghanistan. paul mcmullan was a reporter and editor at "the news of the world." >> it was certainly a really commonplace practice. >> reporter: this scandal reaches far beyond the murdoch empire. this week, it was revealed that london police were selling the

paper scoops in exchange for bribes. there are even allegations that the prime minister, a close friend of murdoch, turned a blind eye, even though he knew what was going on. >> and jeffrey there, even talking of arrests tonight? >> reporter: oh, that's right, diane. a huge criminal investigation is under way involving dozens of police investigators. we are told we should brace for an avalanche of arrests involving police themselves, as well as reporters and editors. the first arrests could come as soon as tomorrow. one of the former editors of "the news of the world." >> jeffrey kofman reporting on the outrage in london tonight. and after 997 days behind bars, casey anthony is getting ready to go home. her lightning fast release putting new pressure on the jurors who acquitted. abc's ashleigh banfield has been covering this case from the beginning and she e arts us off in orlando again tonight. ashleigh? >> reporter: diane, the stormy weather behind me may have washed away much of the frenzy

in this courthouse, but boy, oh, boy, the day began much like every other one in this spectacular case, with yet another twist. >> state of florida versus casey marie anthony. >> reporter: casey anthony's criminal case wrapped up with the judge throwing the book at her, keeping her in jail as long as he legally could. >> i will sentence you to one year in the orange county jail, imposing a $1,000 fine on each count. >> reporter: back-to-back, that's four years. but word today, casey will be a free woman in just one week. >> her release date has been calculated as july 13th, 2011. >> reporter: how could she get out after serving just under three years? among other things, credit for good behavior. described by casey's jail guards at trial. >> miss anthony is a model inmate. >> reporter: but this is the

community into which she'll be released. >> the only way we can get justice for caylee is so casey doesn't make money. >> reporter: and the state agrees. it's filed suit against casey for the cost of the investigation, as has the woman who claims casey stole her name to fabricate a nanny. and the group that helped search for her child is also considering a suit. when casey leaves jail, everything that was seized from her by police will be returned, including that pontiac sunfire, the one prosecutors said smelled like death. some of the sensational fallout from this case, security and worry. the judge worried about his, the anthonys worried about theirs. and now word that death threats have been leveled agaiait the jurors, diane. >> all right, speaking of those jurors, ashleigh, one juror has now told abc news exclusively what the seven women and five men on the jury saw as the prosecution's chief failure. abc's "nightline" anchor terry moran, a veteran of court reporting, explains.

>> reporter: what went wrong? >> we the jury find the defendant not guilty. >> reporter: jennifer ford, juror number 3, told us the first vote in the jury room was 10-2, not guilty on first degree murder. and they couldn't agree on lesser charges, either. >> eventually a count, it was 6-6, manslaughter, not guilty. >> reporter: one huge problem for prosecutors in this trial, they could never pinpoint exactly how caylee anthony died. in part because her body was so decomposed when found. >> when you're charging someone with murder, you have to at least know how the person died. if you have no idea how they died, if it could have been an accident, legitimately could have been, then you can't -- you can't -- you can't -- you can't convict based on that. like it could have been. could have been is not enough to convict. in my opinion. >> reporter: duct tape on a baby in a bag rotting in the woods. most people look at that, they put two and two together, they

say, that's a murder. >> well, in our country, unfortunately, we have to prove it. >> reporter: and there was one more factor in that jury room. this was a death penalty case. >> someone else's life in your hands. so, if they want to charge and they want me to take someone's life, they have to prove it. you have to prove it or else i'm a murderer, too. >> reporter: law professor alan dershowitz says the prosecutors should not have sought the death penalty here. >> the media was in a frenzy and the prosecution got into a frenzy. and they asked for too much and they ended up getting too little. >> reporter: the jurors did not want to acquit casey anthony of murder, but the evidence did not persuade them beyond a reasonable doubt. >> not guilty doesn't mean innocent. it doesn't mean innocent. >> reporter: and that, in the end, may be the lasting legacy of the trial of casey anthony, this case that transfixed a nation. a reminder that the justice system isn't designed to reflect the emotions outside the courthouse. it's designed to make sure the

government meets its burden of proof beyond a reasonable doubt inside the courtroom. diane? >> thanks so much, terry. and we turn now to dollars and sense in washington. and the collision course as we face the deadline on the national debt, when, in essence, america's credit will run out. both sides, republicans and democrats, were summoned to the white house today. so, what benefits are they likely to change? what does it mean for americans of all ages? abc's jake tapper is at the white house tonight. jake, tell us what happened. >> reporter: good evening, diane. well, sources tell abc news that president obama told congressional leaders in their private meeting that this is a moment to be seized. that as long as they are attempting d dicit reduction, they should think big. and what they're talking about could affect millions and millions of americans. there's a lot of cutting going on at the white house these days. and the branches of this elm could be just the beginning. poth

both president obama and the house speaker, john boehner, today pushed congressional leaders to reduce the deficit by up to $4 trillion over the next decade or so. but how to get there is the sticking point. the president wants both spending cuts and new taxes and revenue. >> everybody acknowledged that there's going to be pain involved politically on all sides. >> reporter: and that pain will trickle down. and how might you feel it? republicans want to cut hundreds of billions of dollars from entitlement programs, including medicaid for low income americans. and for seniors receiving medicare and social security. benefits could be reduced. particularly for wealthier seniors. serious pain for seniors and serious fears. >> without medicare, i would be in a wheelchair or dead. >> reporter: and democrats say no way. >> we do not support cuts in benefits for social security and medicare. >> reporter: they're pushing for tax increases by eliminating various loopholes. $45 billion by eliminating oil and gas company subsidies.

$60 billion from eliminating a specific tax break for businesses. and $290 billion from capping the amount that wealthier americans can deduct from their taxes. not to mention other possible changes to the tax code that could impact some small business owners. >> if our taxes go up, there's only one way to come from a loss to a profit, and that's reduce the cost. which would be employees. >> reporter: these are proposals that republicans oppose. >> we are not going to raise taxes on the american people. >> reporter: the only area of agreement seems to be right now that not addressing the deficit problem, diane, would mean even more pain, with skyrocketing interest rates and another economic recession. the congressional leaders will reconvene here at the white house on sunday. diane? >> and the clock keeps ticking. thank you, jake. and still ahead on "world news," radiant spirit and survival. jaycee dugard, 18 years of captivity and abuse, speaking out for the first time. stem cell solution?

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monkey. a fifth grader who set out for the school bus one morning where she was kidnapped by a convicted sex predator, phillip garrido, who handcuffed her, raped her, imprisoned her. and she gave birth twice in a deranged backyard. for 18 years, she was never allowed to say her name. on the day her first child is born, she is alone in her backyard prison. so, august 18th, 1994, you are how old? >> 14. >> reporter: you're in labor and there's nobody there. having a baby in a backyard. >> yep. i did. very painful, but -- then i saw her. she was beautiful.

i felt like i wasn't alone anymore. had somebody that was mine. i wasn't alone. and i knew i could never let anything happen to her. i didn't know how i was going to do that, but i did. >> reporter: in her story of survival, a lesson for every person alive. i'm trying to imagine how you are coping. i'm trying to imagine -- >> i don't know. i can't imagine being beaten to death, you know? but you can't imagine being kidnapped and raped, you know? so, it's just -- you just do what you have to do.

to survive. >> reporter: and 18 years later, a stunning reunion with the mother who loves her, but remembers something she forgot to do for her child that day, 18 years ago. >> i had been late to work three monday mornings in a row and i was focused on myself. trying to get myself out that door so i wouldn't be late for work. and i chose not to go in and kiss my girls good-bye that morning. wanted to be on time. and -- for 18 years, i kicked myself for not kissing my baby good-bye. >> how could you have known, though? you can't beat yourself up about that. >> no. but it's a good lesson. you know? take a minute for your kids.

do that extra thing that may be an inconvenience to you, but is important to them. >> it is an astonishing story of hope and enduring love and courage. jaycee, her mother and also, chris cuomo will be investigating how law enforcement failed to find her, even though they made 60 visits to the house where she was being held. a two-hour special this sunday, from 9:00 to 11:1: eastern time. and cocong up, medical breakthrough. discovering the healing power of your own stem cells for your heart. staying active can actually ease arthritis symptoms.. but if you have arthritis, staying active can be difficult. prescription celebrex can help relieve arthritis pain

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be helped. they are now using stem cells taken from your own body to repair damaged hearts. the ones that radiate pain through the chest. and our own dr. richard besser is here to tell us about it. how big is this? >> reporter: this is extremely exciting. this is one of the hottest areas of medical research. because stem cells can turn into any type of cell in your body. let me show you what they did. chest pain is caused when you don't get enough blood flu thro to your heart muscle. take a look at this heart. this gray area isn't getting enough blood. when you exercise in particular, you're going to have pain there. so, they gave these people a drug to produce more stem cells. then, they injected the stem cells directly into that damaged heart muscle. and what they found was that those cells caused little blood vessels to grow. those blood vessels latch onto the main arteries and can ovide more blood flow -- >> they've seen it happening. >> reporter: they've seen the results of this. the results are dramatic. people who have had this done have 40% fewer episodes of chest pain. that's absolutely incredible.

>> is it still frontier science fiction work? >> reporter: it sounds like science fiction but it's happening now. i want you to meet george reed. he's 75, he participated in the study. his results are exceptional. >> i had heart pains three times a day. it felt like i got shot in the chest. >> he was out of breath, couldn't walk around very much. and felt tired. i was very worried about him. >> if i hadn't had the treatment, i think i would be dead. so, they took all my blood and took the stem cells out of it and about two weeks later, they took and shot them stem cells back in and around my heart. well, almost immediately i had more energy. i don't have no pain at all. well, i can help out around the house. mow the grass, which my wife had to do. i think she's the greatest girl in the world. she put up with me for a long time.

>> that is pretty amazing. so, is it just going to be hearts? what's the next thing up? >> reporter: it's not. they're looking at every part of the body. doctors in sweden just reported on someone with throat cancer, with the first stem cell windpipe, comes out of the hospital tomorrow. on abcnews.com, i have lists of all the types of work going on in this area and where you can find trials. >> we are looking at the future. thank you, dr. richard besser. and still ahead on "world news," made in america summer, coming to your block.

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and finally tonight, our made in america series is back, a blockbuster summer road trip with a big surprise to come. and we want you to join in, as we hope to create more american jobs right in your neighborhood. so, here's the team, abc's david muir and sharyn alfonsi. >> reporter: hi. how are you? >> reporter: diane, we're at it again. this time, not knocking on one front door, but on front doors through an entire neighborhood. >> reporter: nice to meet you! >> reporter: can't tell you where we are, but you'll recall when this whole made in america journey started -- >> reporter: remember the usrys? mom, dad, son, daughter and the

dog, amber? they were like so many other families who've told us their house must be filled with plenty that's made in america. they had no idea what was coming. >> hello. >> reporter: hey, it's "world news." how are you? so, here's the ten-second recap. they thought at least half of what they owned was made in america. >> made in thailand. >> reporter: but we checked the labels, emptied everything not made here -- and this was what was left. the vase. what do you think? >> reporter: and remember that number from our team of economists? if every one of us spent an extra $3.33 on u.s.-made goods, it could create about 10,000 new jobs in this country, right now. >> reporter: and the usrys, they were just the beginning. because we're now 2,250 miles away from that dallas home. we've picked a brand new american neighborhood. >> reporter: and we're at it again. and we're not just hitting that house, we're hitting that one, that one, the whole neighborhood. and they have nonodea what's coming. >> reporter: this is the made in america summer as we search for the one thing that will get neighborhoods everywhere talking. >> reporter: we've got to go. >> reporter: that's right. the mission this time to find the one thing made in america these families have right now,

or are heading out to buy, that they can't wait to tell the rest of america about. >> reporter: you all ready? not just one family. the entire neighborhood. >> reporter: and which family will surprise us most with their one thing? >> where are they? don't forget our made in america summer kicks off next week, right here. david and sharyn will be back to unveil the surprising neighborhood challenge for you. please don't miss it. and, we thank all of you for watching. we're always on abcnews.com. and don't forget, "nightline's" coming up later. we'll see you right back here tomorrow night. next at 6:00, positive economic news rallies wall street. will it be enough to impact main street? >> the man suspected of stealing a picasso. what is being done to prevent it from happening again. >> and in sacramento, the state legislature took a step

towards abolishing the death penalty. voters will have the final say. >> and plans to make it easier for ex-cons to get housing and why landlords call it outrageous. good evening, i'm dan ashley. >> new signs tonight that the economy is on the rebound. >> yes. some of the numbers look encouraging but when it comes to the economy as we have learned recently, looks can be deceiving. a rebound and strong jobs reports pushed stocks near their highest levels of the year. the dow jones up 93 points, finishing at 12,719, up several hundred points from only weeks ago. abc 7 is live in san jose tonight that. saul well and g but the question is whether this translates to ordinary americans. >> well, keep this in mind. one month retail sales provide a snap shot but don't signal a